2015 (12) TMI 1480 - AT - Customs

Import of materials for the manufacture of Heart Valve Prosthesis - claim of exemption - Suppression of facts - Imposition of equivalent penalty - Held that - Dept. issued show cause notices on the same items in earlier period within the normal period. So, the Department was aware of the import of these items. It is noticed that the appellant claimed exemption benefit in respect of the entire consignment and out of that about ₹ 68 lacs, the Adjudicating Authority dropped the demand. Hence, the findings of the Adjudicating authority on suppression of the fact in respect of the balance amount cannot be sustained. It is a case of claim of exemption notification. - demand of duty alongwith interest is set aside, as barred by limitation. The penalties imposed on both the appellants are also set aside - Decided in favour of assessee.

Summary

Issues:
1. Demand of Customs duty on imported goods
2. Imposition of penalty
3. Barred by limitation defense
4. Exemption benefit claim

Analysis:
The case involved the appellant importing various materials for manufacturing Heart Valve Prosthesis, leading to a demand of Customs duty, interest, and penalties. Initially, a show cause notice was issued proposing a substantial duty demand, interest, and penalties. The Adjudicating Authority confirmed the duty demand and imposed penalties, which were challenged. The Tribunal remanded the matter for fresh adjudication, resulting in a reduced duty demand and penalties on specific items.

During the proceedings, the appellant did not contest the demand on merit but raised the defense that the entire demand was time-barred. The appellant highlighted that the Department had previously issued show cause notices for similar items within the normal period, indicating awareness of the imports. The Adjudicating Authority had dropped a significant portion of the demand based on exemption claims, leading to the conclusion that the suppression of facts regarding the remaining amount was not sustainable.

Ultimately, the Tribunal found in favor of the appellant, setting aside the demand of duty and interest as time-barred. The penalties imposed on the appellants were also revoked based on the limitation defense and the exemption benefit claim. The decision emphasized that the case primarily revolved around the issue of claiming exemption notification and the defense of being barred by limitation, resulting in both appeals by the appellants being allowed.

In conclusion, the judgment by the Appellate Tribunal CESTAT AHMEDABAD highlighted the importance of timely action by the Department, the significance of exemption claims, and the defense of limitation in customs duty cases. The decision provided relief to the appellants by setting aside the duty demand, interest, and penalties, underscoring the legal principles governing such matters.